Stephen Karganovic
Compared to notorious hotspots such as Syria and Yemen, or potential conflict triggers such as Iran, the former Soviet republic of Azerbaijan, located between the Caucasus and Caspian Sea, would seem like a back burner case and thus receives less attention that it actually should. Without minimizing the significance of other areas of regional concern, however, the case can be made for moving Azerbaijan much closer to the front burner.
In addition to being an important energy source since the late nineteenth century, when it was a province of Czarist Russia, Azerbaijan today continues to be that, but additionally it is a key segment in the Eurasian New Silk Road projected by China with Russian support and cooperation. Its status on the chessboard has therefore hardly gone unnoticed by Western hegemons. They are compelled by new realities to accept certain detours in their Eurasian domination strategy, but their ultimate ambitions and goals remain unchanged.
One clear sign of their continuing interest in Azerbaijan is the recent initiation by the European Union of talks with Baku on concluding what the EU calls a “strategic modernization partnership” with that country. In general, EU relations with countries in the Caucasus have been rather complex. By all accounts, Azerbaijan is the hub in that network of relationships. The country stands out mainly for two reasons: its vast natural gas and oil resources and its geographical location, which is of great significance for the future operation, as well as blocking, of the New Silk Road.
Baku is an attractive and distinctive city.
The ambivalent hope in Baku is that the successful conclusion of the proposed partnership agreement with the EU might benefit Azerbaijan with levels of cooperation and economic diversification that would lift the country out of the confines of an energy dependent economy. But an additional inducement for exploring closer ties with the EU is also the prospect – however remote at present – of gaining support in the Nagorno Karabakh confrontation with Armenia, as well as securing visa-free status for EU travel for Azeri citizens.
In weighing its options, Baku might take into consideration that, past promises notwithstanding, the EU still has not delivered on its visa-free travel regime commitments to Georgia and the Ukraine. As far as Nagorno Karabakh is concerned, the EU is not too keen on resolving it for the moment but actually prefers a protracted conflict. That gives it and the Western alliance as a whole a useful “instability point” and the opportunity to profit from playing local actors against each other in the strategically important region. Anyway, Baku and Erevan have not even signed a peace agreement concerning Nagorno Karabakh, an Armenian populated province within Azerbaijan which is currently under the control of Armenian separatists.
Bilateral relations between the EU and Azerbaijan are presently governed by the Partnership and Cooperation Agreement concluded in 1999. The Azeri government was presented by the EU with the new and expanded version of the agreement in May of 2015, during the Riga “Eastern Partnership” summit.
[dropcap]I[/dropcap]t is worth noting that the until recently much discussed “Eastern Partnership” included Belarus, the Ukraine, Moldavia, Georgia, Armenia, and Azerbaijan. The idea was to bring countries within the Baltic-Black Sea basin politically and economically closer to the EU as a step, of course, in drawing them more firmly into the ambit of the Western alliance system. On the whole, however, that concept has turned out to be a resounding failure.
Some of the member countries simply fell apart, such as Georgia, with the separation of South Ossetia and Abkhazia. The Pridnestrovie region separated from Moldova, and the province of Gagauzia also announced separatist intentions. The Ukraine is facing similar problems. Although those countries have left the Russian interest zone, the territorial disputes in which they became involved made them ineligible for NATO membership. Economically, they have grown notably weaker and can only conclude with the EU unequal association treaties, along the lines of “colonization without integration.” Mindful of these unfavorable trends, over the last couple of years Azerbaijan has sought its own path, while after some hesitation Armenia joined the Eurasian Union.
Incidentally, in its dealings with the EU Serbia also should take into account the failure of the “Eastern Partnership.” It should try to learn from the mistakes of others, instead of obediently dancing to Brussels’ tune. That is all the more imperative since Azerbaijan has become an important partner of Serbia’s military industry.
As a result, up until now Azerbaijan has been rather circumspect in moving toward closer relations with the EU, and so far has been holding back on signing the new Association Agreement proposed by the EU. It will be wise to continue to be skeptical. Its government, of course, makes no secret of its aversion to “liberal values.” As well, the ancient Nagorno Karabakh conflict heats up every now and then. But for all that, from the standpoint of the EU, given its considerable mineral wealth Azerbaijan continues to be an attractive potential protégé.
In 2015, trade with EU countries was 47,5 % of Azerbaijan’s overall total, while in the first quarter of 2016 that index stood at 43%. During the last 10 years, EU investors brought 20 billion dollars in capital investments into Azerbaijan, of which only 2,7 billion was in economic sectors other than raw materials.
These figures suggest that Europe’s basic interest in investing in Azerbaijan continues to be primarily in the energy sector. Azerbaijan’s keenness to diversify its economy, however, is understandable. Sale of energy resources historically has been a source of ample funds, amounting to billions of dollars. In the 2006 – 2008 period alone its economy was one of the fastest growing in the world, with an average growth rate of 28% per annum. But the drastic fall in the world price of energents hurt the Azeri economy, three quarters of which depends on natural gas and oil sales. The consequent devaluation of the national currency resulted in price rises and decline in purchasing power. The classic Third World pattern of a rich country with widespread povery quickly reemerged. Many Azeris are seeking employment in Russia in order to support their families back at home.
As things stand, Azerbaijan is hesitant to sign with the EU an Association Agreement similar to the ones concluded earlier with the Ukraine, Georgia, and Moldavia. Its insistence on terms of equality displeases Brussels. To add to that, Baku’s relations with Moscow remain warm and friendly.
Yet the fact remains that Azerbaijan, like every small and vulnerable country, has its strong and weak points. The EU’s principal goals are to open up the Azeri market to European companies and to obtain a privileged position in the exploitation of the country’s energy resources. At the same time, EU politicians are working hard to exert pressure on Azerbaijan in order to weaken its position in the negotiating process.
For the European Commission the strategic issue revolves around the diversification of transit routes for Azerbaijan’s energy resources. That is the polite way of saying that their objective is to find ways to direct Azeri natural gas and oil away from Russia’s distribution pipelines and toward the Western-controlled ones. So far millions of euros have been invested into the “diversification” program. At the same time, EU countries must tread carefully and avoid missteps which could disenchant Baku and close its markets to European companies which are already suffering the consequences of sanctions their political leaders foolishly imposed on Russia. The emergence of any additional oil and gas problems is highly undesirable from the European point of view, especially since one branch of the New Silk Road is operational already.
In order to induce Baku to act more compliantly, Western alliance countries and international institutions under their control are resorting to playing the standard card of “human rights” and “democracy” violations. For the moment Azerbaijan’s deficiencies in promoting “democratic values” are being kept in the background, but Baku is constantly being reminded that the issue could be brought front and center at any moment. The Europeans—acting like the US Trojan Horse they really are— are determined to sneak into the Association Agreement that they are hoping they can persuade Azerbaijan to sign a number of binding “human rights” conditions that could later be activated should Baku decline to be fully cooperative. Under the guise of “support for democracy” a pro-Western fifth column is actively being set up in Azerbaijan, presumably ready to spring (pun deliberate) into action at the opportune moment. The script for yet another “color revolution” is in place ready to be detonated at the propitious moment. And we know the role that the prostituted Western media will play when its controllers give it the usual signal.
The trade and economic portions of the new agreement that the EU is putting before Baku will hardly feature the preferential provisions expected by the Azeris and it is likely to turn into a huge disappointment for them. The EU is going all out for one-sidedly bolstering its trade position within Azerbaijan’s domestic market. For all its desire, Azerbaijan cannot easily become competitive on the European market. However, inundation with products from the Euro zone will suffocate domestic producers, as well as eliminate their products from the domestic market.
On the whole, the EU concept would assign to Baku the humble “narrowly specialized” role of supplier of cheap raw materials. Brussels understands very well that alternative Iranian gas cannot begin to supply the European market in less than 5 to 6 years. And even that only assuming favorable political, economic, and financial conditions.
After Brexit the EU is in disarray and in a state of existential crisis. It is difficult to predict what it is more likely to do: focus on its internal problems, especially in the light of the growth of populist and nationalist sentiments, or consider further eastward expansion. It must be noted that internal problems notwithstanding the EU continues with efforts to gain greater influence over non-member governments with the objective of expanding the reach of its neo-liberal ideology in the interest of its own economic growth.
It appears, however, that most Azeris have grown generally disenchanted with the European project. The Ukranian fiasco was an object lesson to all. A genuine partnership should be transparent and its advantages and disadvantages should be clearly understood. Whatever the motives and dilemmas of their political elite, the Azeris are interested chiefly in enjoying a visa-free regime with the EU. However, as the experience of Georgia and the Ukraine demonstrates the EU is not keen to open up its labor market to the citizens of those countries. So by that criterion Baku did not make a mistake in declining, so far at least, to sign on to the Association Agreement offered to it by the EU.
That conclusion is bolstered by the evidence of the deep economic malaise that has gripped Moldova and the Ukraine during the last two years, after they acceded to the Association Agreement. The “European choice” imposed by Brussels and some Eastern European “democracy exporters” through the Eastern Partnership program did not solve any of those countries’ previous problems, but it did generate quite a few new ones.
In a word, the “modernized partnership” concept serves exclusively the political objective of attaching Azerbaijan more closely to the West while gaining a free hand to exploit its resources. Under the guise of a “new strategic relationship” the West is singlemindedly pursuing its real aim – to enhance its presence in the Caucasus at the expense of Russia. In the process, the interests of the Azeri nation are of no consequence and Baku would simply be turned into a tool of Brussels’ geopolitical games.
MAIN IMAGE: Baku’s skyline with its distinctive Flame Towers.
The author is a well known independent geopolitical analyst
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